(1) How does financial intermediation ‘fit’ into the process of income
determination or creation of the aggregate output of an economy?
(2) A. For the proper operation of a modern day economy, why is it necessary to
have an efficient financial system? B. What difficulties do you think would
face the population of an economy without a ‘modern’ financial system? C
Describe the financial system of any Caribbean country of your choice.
...view middle of the document...
(4) Economists have argued [C.Y. Thomas] that Caribbean development has been
retarded because the economies do not have sufficiently well-developed
financial markets. Does this view sound reasonable?
(5) A. Why is understanding and study of finance seemingly becoming so
important in the 21st century? B. Is saving among economic units desirable?
C. Why policymakers place such emphasis on increasing levels of saving, and
the need to develop a savings culture in the Caribbean. D. What is the likely
impact on an economy that has 98%-100% of its economic units as net
(6) “Financial intermediaries, such as commercial or retail banks, insurance
companies and mutual funds, are only interested in making a big profit, and
there is no benefit to having them operating.” Discuss.
(7) What are the main means through which a firm might be financed in a modern
financial system? In the Caribbean region’s financial services apparatus, what
would you identify as the main source of funding? Explain why the source of
funding identified is the dominant one. What do you envisage as possibilities
for change in this condition in the future?